HomeDiamonds & GemstonesGem Diamonds' sales decline

Gem Diamonds’ sales decline

A night shot of the
first processing plant
at Gem’s Letseng
London, England — MININGREVIEW.COM — 16 July 2009 – Leading global diamond producer Gem Diamonds Limited says first-half sales from its South African and Australian mines were lower due to strong currencies, and that it remained cautious about demand in the United States, but its cash position was strong with no debt.

Revealing this in a news release issued here, the company said rough diamond prices had been firming up in the second quarter. Gem Diamonds had US$118 million (R950 million) in cash as of 30 June, with no outstanding debt.

Reuters reports that shares in the company rose as much as 8.4% in morning trade on the London Stock Exchange.

“The diamond market experienced further falls in prices of rough diamonds at the beginning of the first half of this year, however in recent months prices first stabilised and then strengthened," Gem Diamonds chief executive Clifford Elphick said in a statement.

The company said large diamonds from its flagship Letseng mine in Lesotho “’ in which it held 70% “’ remained some of the most sought after, attracting high prices per carat.

The Letseng mine generated first-half sales of US$74.1 million (R600 million), down 18% from a year-ago. Ellendale’s rough diamond sales for the period fell 48% to US$30.8 million (R250 million).

The Ellendale E9 operations in Australia and the Letseng mine in Lesotho are the company’s only producing operations after a drop in diamond prices forced the company, and many of its rivals, to put a number of mines on care and maintenance, and to mothball future projects.